Admeld Purchase Expands Google's Online Ad Empire

Google--almost as synonymous with online advertising as it is with online search--is once again adding to its empire with the $400 million acquisition of Admeld. The move expands Google's display ad business to rival its Web-search based ad business and drive more revenue for the Internet giant.

Admeld is a three-year old startup based in New York. It acts as a sort of clearinghouse for lower-priced display ad inventory of larger sites, while providing the sites with the ability to control how the ad space is sold and who can buy it.

With Admeld in the fold, Google will own an even larger piece of the online ads pie.In a post on The Official Google Blog, Neal Mohan, Vice President of Display Advertising for Google, explains the logic behind the Admeld acquisition. "By combining Admeld's services, expertise and technology with Google's offerings, we're investing in what we hope will be an improved era of flexible ad management tools for major publishers," adding, "Together with Admeld, we hope to make display advertising simpler, more efficient and more valuable, provide improved support and services, and enable publishers to make more informed decisions across all their ad space."

Of course, the purchase has to pass regulatory scrutiny. The government seems to be taking a more cautious or skeptical view of recent major acquisitions, and Google in particular. The FTC, FCC, DOJ, and other agencies all seem to be jumping into the fray to weigh in on purchases like Microsoft acquiring Skype, or AT&T buying T-Mobile.

Mergers and acquisitions are a perfectly legitimate means of growing a business and providing more value for customers, but not if it is at the expense of a fair market or level playing field. Google already holds a dominant stake in the online advertising industry, and federal agencies have to examine closely what the impact will be on competition if the Google juggernaut swallows yet another piece of the pie.

Assuming the Admeld purchase passes regulatory hurdles, it will be the sixth-largest purchase in Google's history, behind other high-profile online advertising acquisitions such as DoubleClick and Admob.